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                                                                   Exhibit 10.43


                               OPERATING AGREEMENT
                                       FOR
                        SUTRO INVESTMENT PARTNERS V, LLC,
                      A DELAWARE LIMITED LIABILITY COMPANY










         THE SECURITY WHICH IS THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 506 PROMULGATED UNDER THE ACT, AND THIS SECURITY
HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE STATE SECURITIES LAWS OF ANY
RELEVANT JURISDICTION IN WHICH THIS SECURITY HAS BEEN OFFERED AND SOLD PURSUANT
TO AN APPLICABLE EXEMPTION THEREFROM. IT IS UNLAWFUL TO CONSUMMATE A SALE OR
TRANSFER OF THIS SECURITY WITHOUT PROVIDING THE MANAGERS WITH AN OPINION OF
COUNSEL TO THE EFFECT THAT A PROPOSED TRANSFER OR SALE THIS SECURITY (i) DOES
NOT AFFECT THE ORIGINAL ISSUANCE AND SALE OF SECURITIES IN THE COMPANY PURSUANT
TO THE EXEMPTIONS FROM REGISTRATION PROVIDED BY RULE 506 UNDER THE ACT AND
PURSUANT TO ANY APPLICABLE STATE EXEMPTION FROM REGISTRATION AND QUALIFICATION
RELIED UPON BY THE MANAGER AND (ii) IS IN COMPLIANCE WITH ALL APPLICABLE STATE
OR FEDERAL SECURITIES LAWS.

         THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITY WHICH IS THE
SUBJECT OF THIS AGREEMENT OR ANY INTEREST THEREIN IS SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN ARTICLE VII OF THIS AGREEMENT.


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                                TABLE OF CONTENTS


<TABLE>
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                                                                                                         PAGE

         <S>       <C>                                                                                     <C>
ARTICLE I - DEFINITIONS...................................................................................  1
         1.1      "Act"...................................................................................  1
         1.2      "Affiliate".............................................................................  1
         1.3      "Agreement".............................................................................  1
         1.4      "Articles"..............................................................................  1
         1.5      "Assignee"..............................................................................  1
         1.6      "Bankruptcy"............................................................................  1
         1.7      "Capital Account".......................................................................  2
         1.8      "Capital Contribution"..................................................................  3
         1.9      "Code"..................................................................................  3
         1.10     "Company"...............................................................................  3
         1.11     "Company Minimum Gain"..................................................................  3
         1.12     "Depreciation"..........................................................................  3
         1.13     "Determination Date"....................................................................  3
         1.14     "Dissolution Event".....................................................................  3
         1.15     "Economic Interest".....................................................................  3
         1.16     "Fiscal Period".........................................................................  4
         1.17     "Fiscal Year"...........................................................................  4
         1.18     "Gross Asset Value".....................................................................  4
         1.19     "Interest"..............................................................................  5
         1.20     "Majority Interest".....................................................................  5
         1.21     "Manager"...............................................................................  5
         1.22     Reserved................................................................................  5
         1.23     "Member"................................................................................  5
         1.24     "Membership Interest"...................................................................  6
         1.25     "Nonmanager Member".....................................................................  6
         1.26     "Percentage Interest"...................................................................  6
         1.27     "Person"................................................................................  6
         1.28     "Profits" and "Losses"..................................................................  6
         1.29     "Regulations"...........................................................................  7
         1.30     "Remaining Members".....................................................................  7
         1.31     "Sutro".................................................................................  7
         1.32     "Tax Matters Partner"...................................................................  7
         1.33     "Targeted Investment"...................................................................  7

ARTICLE II - ORGANIZATIONAL MATTERS.......................................................................  7
         2.1      Formation...............................................................................  7
         2.2      Name....................................................................................  7
         2.3      Term....................................................................................  7
         2.4      Office and Agent........................................................................  7
                  A.       Principal Office...............................................................  7
                  B.       Registered Office..............................................................  8
                  C.       Other Jurisdictions............................................................  8
</TABLE>


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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         <S>      <C>                                                                                     <C>
         2.5      Purpose and Business of the Company.....................................................  8

ARTICLE III - CAPITAL CONTRIBUTIONS.......................................................................  8
         3.1      Capital Contributions of the Manager....................................................  8
         3.2      Capital Contributions of Nonmanager Members.............................................  8
         3.3      Timing; Other Contributions.............................................................  8
         3.4      Failure to Make Contributions...........................................................  8
         3.5      No Interest............................................................................. 10

ARTICLE IV - MEMBERS...................................................................................... 10
         4.1      Limitations on Liability of Members..................................................... 10
         4.2      Liability of Members to the Company..................................................... 10
                  A.       Liability of Members to the Company............................................ 10
                  B.       Member as Trustee for the Company.............................................. 10
                  C.       Waiver of Liability of Member.................................................. 10
         4.3      Admission of Additional Members......................................................... 11
         4.4      Withdrawals............................................................................. 11
         4.5      Transactions With The Company........................................................... 11
         4.6      Remuneration To Members................................................................. 11
         4.7      Members Are Not Agents.................................................................. 11
         4.8      Voting Rights........................................................................... 11
         4.9      Meetings of Members..................................................................... 11
                  A.       Date, Time and Place of Meetings of Members; Secretary......................... 11
                  B.       Power to Call Meetings......................................................... 11
                  C.       Notice of Meeting.............................................................. 11
                  D.       Manner of Giving Notice; Affidavit of Notice................................... 12
                  E.       Validity of Action............................................................. 12
                  F.       Quorum......................................................................... 12
                  G.       Adjourned Meeting; Notice...................................................... 12
                  H.       Waiver of Notice or Consent.................................................... 13
                  I.       Action by Written Consent without a Meeting.................................... 13
                  J.       Telephonic Participation by Member at Meetings................................. 13
                  K.       Record Date.................................................................... 14
                  L.       Proxies........................................................................ 14
         4.10     Certificate of Membership Interest...................................................... 14

ARTICLE V - MANAGEMENT AND CONTROL OF THE COMPANY......................................................... 15
         5.1      Management of the Company by Manager.................................................... 15
         5.2      Resignation and Removal of Manager...................................................... 15
         5.3      Powers of Managers...................................................................... 15
                  A.       Powers of Managers............................................................. 15
                  B.       Limitations on Power of Managers............................................... 15
         5.4      Performance of Duties; Liability of Manager............................................. 16
</TABLE>


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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         <S>      <C>                                                                                     <C>
         5.5      Payments to Managers.................................................................... 17
         5.6      Limited Liability....................................................................... 17
         5.7      Membership Interests of Manager......................................................... 17

ARTICLE VI - ALLOCATIONS OF PROFITS AND LOSSES; DISTRIBUTIONS............................................. 17
         6.1      Capital Accounts........................................................................ 17
         6.2      Allocations............................................................................. 18
                  A.       Profits and Losses............................................................. 18
                  B.       Recapture...................................................................... 18
         6.3      Special Capital Account Allocations..................................................... 18
                  A.       Section 704 Allocations........................................................ 18
                  B.       Tax Allocations................................................................ 18
                  C.       Other Allocation Rules......................................................... 19
                  D.       Provisional Allocation......................................................... 19
         6.4      Withdrawals from Capital Accounts....................................................... 20
         6.5      Distributions........................................................................... 20
         6.6      Form of Distribution.................................................................... 20
         6.7      Restriction on Distribution............................................................. 20
                  A.       Limitation..................................................................... 20
                  B.       Liability for Return........................................................... 20
                  C.       Limitation on Liability........................................................ 21
         6.8      Returned Distributions.................................................................. 21
         6.9      Obligations of Members to Report Allocations............................................ 21

ARTICLE VII - TRANSFER AND ASSIGNMENT OF INTERESTS........................................................ 21
         7.1      Transfer and Assignment of Interests.................................................... 21
         7.2      Further Restrictions on Transfer of Interests........................................... 21
         7.3      Substitution of Members................................................................. 22
         7.4      Permitted Transfers..................................................................... 22
         7.5      Effective Date of Permitted Transfers................................................... 22
         7.6      Rights of Legal Representatives......................................................... 22
         7.7      No Effect to Transfers in Violation of Agreement........................................ 22

ARTICLE VIII - CONSEQUENCES OF DISSOLUTION EVENTS......................................................... 23

ARTICLE IX - ACCOUNTING, RECORDS, REPORTING BY MEMBERS.................................................... 23
         9.1      Books and Records....................................................................... 23
         9.2      Delivery to Members and Inspection...................................................... 24
                  A.       Delivery of Information........................................................ 24
                  B.       Inspection and Copying......................................................... 24
                  C.       Right to Request............................................................... 24
                  D.       Copies of Amendments........................................................... 24
         9.3      Annual Statements....................................................................... 24
</TABLE>


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                                TABLE OF CONTENTS
                                   (CONTINUED)
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        <S>       <C>                                                                                     <C>
                  A.       Delivery of Statements......................................................... 24
                  B.       Tax Information................................................................ 24
         9.4      Company Accounts........................................................................ 25
         9.5      Accounting Decisions and Reliance on Others............................................. 25
         9.6      Tax Matters for the Company Handled by Manager and Tax Matters Partner.................. 25

ARTICLE X - DISSOLUTION AND WINDING UP.................................................................... 25
         10.1     Dissolution............................................................................. 25
         10.2     Certificate of Dissolution.............................................................. 25
         10.3     Winding Up.............................................................................. 26
         10.4     Distributions in Kind................................................................... 26
         10.5     Order of Payment Upon Dissolution....................................................... 26
         10.6     Limitations on Payments Made in Dissolution............................................. 26
         10.7     Certificate of Cancellation............................................................. 26

ARTICLE XI - INDEMNIFICATION.............................................................................. 26
         11.1     Indemnification......................................................................... 26
         11.2     Successors and Assigns; Limitations..................................................... 27

ARTICLE XII - COMPETING ACTIVITIES........................................................................ 27

ARTICLE XIII - MISCELLANEOUS.............................................................................. 28
         13.1     Counsel to the Company.................................................................. 28
         13.2     Complete Agreement...................................................................... 28
         13.3     Binding Effect.......................................................................... 29
         13.4     Parties in Interest..................................................................... 29
         13.5     Pronouns; Statutory References.......................................................... 29
         13.6     Headings................................................................................ 29
         13.7     Interpretation.......................................................................... 29
         13.8     References to this Agreement............................................................ 29
         13.9     Jurisdiction; Arbitration............................................................... 29
         13.10    Exhibits................................................................................ 30
         13.11    Severability............................................................................ 30
         13.12    Additional Documents and Acts........................................................... 30
         13.13    Notices................................................................................. 30
         13.14    Amendments.............................................................................. 30
         13.15    Reliance on Authority of Person Signing Agreement....................................... 31
         13.16    No Interest in Company Property; Waiver of Action for Partition......................... 31
         13.17    Multiple Counterparts................................................................... 31
         13.18    Attorney Fees........................................................................... 31
         13.19    Remedies Cumulative..................................................................... 31
         13.20    Power of Attorney....................................................................... 31
</TABLE>


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                                TABLE OF CONTENTS
                                   (CONTINUED)

                                                                          PAGE







                                       6
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                               OPERATING AGREEMENT
                                       FOR
                        SUTRO INVESTMENT PARTNERS V, LLC
                      A DELAWARE LIMITED LIABILITY COMPANY


         This Operating Agreement is made as of March 19, 1998, by and among THE
SUTRO GROUP, a Nevada corporation, and those persons who, themselves or by
attorney-in-fact, have executed this Agreement and been admitted as Members in
accordance with the provisions hereof. The parties by this Agreement set forth
the operating agreement for the limited liability company being organized by
them under the laws of the State of Delaware upon the terms and subject to the
conditions of this Agreement.

                                    ARTICLE I

                                   DEFINITIONS

         When used in this Agreement, the following terms shall have the
meanings set forth below (all terms used in this Agreement that are not defined
in this Article I shall have the meanings set forth elsewhere in this
Agreement):

         I.1       "ACT" shall mean the Delaware Limited Liability Company Act,
as the same may be amended from time to time.

         I.2       "AFFILIATE" of a Member or Manager shall mean any Person,
directly or indirectly, through one or more intermediaries, controlling,
controlled by, or under common control with a Member or Manager, as applicable.
The term "control," as used in the immediately preceding sentence, shall mean
with respect to a corporation or limited liability company the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the controlled corporation or limited liability company,
and, with respect to any individual, partnership, trust, other entity or
association, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled entity.

         I.3       "AGREEMENT" shall mean this Operating Agreement, as
originally executed and as amended from time to time.

         I.4       "ARTICLES" shall mean the Certificate of Formation for the
Company originally filed with the Delaware Secretary of State and as amended
from time to time.

         I.5       "ASSIGNEE" shall mean the owner of an Economic Interest who
has not been admitted as a substitute Member in accordance with Article VII.


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         I.6       "BANKRUPTCY" shall mean: (a) the filing of an application by
a Manager for, or his or her consent to, the appointment of a trustee, receiver,
or custodian of his or her other assets; (b) the entry of an order for relief
with respect to a Manager in proceedings under the United States Bankruptcy
Code, as amended or superseded from time to time; (c) the making by a Manager of
a general assignment for the benefit of creditors; (d) the entry of an order,
judgement, or decree by any court of competent jurisdiction appointing a
trustee, receiver, or custodian of the assets of a Manager unless the
proceedings and the person appointed are dismissed within ninety (90) days; or
(e) the failure by a Manager generally to pay his or her debts as the debts
become due within the meaning of Section 303(h)(1) of the United States
Bankruptcy Code, as determined by the Bankruptcy Court, or the admission in
writing of his or her inability to pay his or her debts as they become due.

         I.7       "CAPITAL ACCOUNT" shall mean with respect to any Member the
individual Capital Account that shall be established and maintained for each
Member and for each Capital Contribution of each Member in accordance with the
following provisions:

                  (a)       To each Capital Account of a Member there shall be
credited such Member's related Capital Contribution, such Member's share of
Profit with respect thereto, any items in the nature of income or gain that are
specifically allocated thereto pursuant to this Agreement and the amount of any
Company liabilities that are personally assumed by such Member or that are
secured by any Company property distributed to such Member with respect thereto;

                  (b)       To each Capital Account of a Member, there shall be
debited the amount of cash and the Gross Asset Value of any Company property
distributed to such Member pursuant to any provision of this Agreement with
respect thereto, such Member's share of Loss with respect thereto, any items in
the nature of expenses or loss that are specifically allocated thereto pursuant
to this Agreement and the amount of any liabilities of such Member that are
assumed by the Company or that are secured by any property contributed by such
Member to the Company with respect thereto;

                  (c)       In determining the amount of any liability, there
shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations;

                  (d)       If any interest in the Company is transferred in
accordance with this Agreement, the transferee shall succeed to the Capital
Accounts of the transferor to the extent that they relate to the transferred
interest.

                  (e)      If the Gross Asset Values of Company assets are
adjusted pursuant to this Agreement, the respective Capital Accounts of all
Members shall be adjusted simultaneously to reflect the aggregate net adjustment
as if the Company were to have recognized gain or loss equal to the amount of
such aggregate net adjustment.


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                  (f)      The foregoing provisions and other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Section 1.704-1(b), and shall be interpreted and applied in a
manner consistent therewith. If the Manager determines that it is prudent to
modify the manner in which the Capital Accounts, or any debits or credits
thereto, are computed in order to comply with Regulations Section 1.704-1(b),
the Manager may make such modification if it is not likely to have a material
adverse effect on amounts distributable to any Member pursuant hereto on the
dissolution of the Company. The Manager shall adjust the amounts debited or
credited to Capital Accounts with respect to any property contributed to the
Company or distributed to a Member and any liabilities secured by such
contributed or distributed property or assumed by the Company or Member in
connection with such contribution or distribution if the Manager determines that
such adjustments are necessary or appropriate under Regulations Section
1.704-1(b)(2)(iv). The Manager shall also make any appropriate modifications if
unanticipated events might cause this Agreement not to comply with Regulations
Section 1.704-1(b), and the Manager shall make all elections provided for under
such Regulations.

         I.8      "CAPITAL CONTRIBUTION" of a Member shall mean the total amount
of cash and the initial Gross Asset Value of property contributed to the capital
of the Company by such Member.

         I.9      "CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time, the provisions of succeeding law, and to the extent
applicable, the Regulations.

         I.10     "COMPANY" shall mean Sutro Investment Partners V, LLC, a
Delaware limited liability company.

         I.11     "COMPANY MINIMUM GAIN" shall have the meaning ascribed to the
term "Partnership Minimum Gain" in the Regulations Section 1.704-2(d).

         I.12     "DEPRECIATION" shall mean, for each Fiscal Year or other
Fiscal Period, an amount equal to the depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such Year or other
Period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for Federal income tax purposes at the beginning of such Year or
other Period, Depreciation shall be an amount which bears the same ratio to such
beginning Gross Asset Value as the Federal income tax depreciation, amortization
or other cost recovery deduction for such Year or other Period bears to such
beginning adjusted tax basis.

         I.13     "DETERMINATION DATE" shall mean the date as of which the value
or amount of Company assets and/or liabilities is to be determined.


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         I.14     "DISSOLUTION EVENT" shall mean with respect to any Manager,
one or more of the following: the death, insanity, withdrawal, resignation,
retirement, removal, expulsion, Bankruptcy or dissolution of any such Manager.

         I.15     "ECONOMIC INTEREST" shall mean the right to receive
distributions of the Company's assets and allocations of Profit and Loss and
similar items from the Company pursuant to this Agreement and the Act, but shall
not include any other rights of a Member, including, without limitation, the
right to vote or participate in the management of the Company, or except as
provided in the Act, any right to information concerning the business and
affairs of the Company.

         I.16     "FISCAL PERIOD" shall mean each period commencing (i) on the
first day of each calendar year, (ii) on the date of any Capital Contribution,
and (iii) on each date next following the date of any withdrawal from a Capital
Account, and the prior Fiscal Period, if any, shall terminate on the day
immediately preceding the day on which a new Fiscal Period commences.

         I.17     "FISCAL YEAR" shall mean the period from January 1 through the
succeeding December 31 or, if earlier, the date of dissolution and termination
of the Company.

         I.18     "GROSS ASSET VALUE" shall mean, with respect to any asset, the
asset's adjusted basis for Federal income tax purposes, except as follows:

                  (a)       The initial Gross Asset Value of any asset
contributed by a Member to the Company shall be the gross fair market value of
such asset, determined as provided in Paragraph 1.18(f) below;

                  (b)       The Gross Asset Value of all Company assets shall be
adjusted to equal their respective gross fair market values, determined as
provided in Paragraph 1.18(f) below, as of the following times: (i) on the
acquisition of an additional interest in the Company by any new or existing
Member in exchange for more than a DE MINIMIS Capital Contribution; (ii) on the
distribution by the Company to a Member of more than a DE MINIMIS amount of
Company property, unless all Members receive simultaneous distributions of
undivided interests in the distributed property in proportion to their
respective Percentage Interests; (iii) on the last day of each Fiscal Period;
and (iv) on a liquidation within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g);

                  (c)       The Gross Asset Value of any Company property
distributed to any Member shall be the gross fair market value of such Company
property, determined as provided in Paragraph 1.18(f) below;

                  (d)       The Gross Asset Value of any Company property shall
be increased (or decreased) to reflect any adjustments to the adjusted basis of
such Company property pursuant to Code Section 734(b) or 743(b), but only to the
extent that such


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adjustments are taken into account in determining Capital Accounts pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m); provided that Gross Asset Values shall
not be so adjusted to the extent that the Manager determines that an adjustment
pursuant to Paragraph 1.18(b) is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
Paragraph 1.18(d); and

                  (e)       If the Gross Asset Value of an asset has been
determined or adjusted pursuant hereto, such Gross Asset Value shall thereafter
be adjusted by the Depreciation taken into account with respect to such asset
for purposes of computing Profit and Loss, and Capital Accounts shall be
adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) and the
Members' distributive shares of depreciation, depletion, amortization, gains and
net loss for tax purposes with respect to such property shall be determined to
take account of the variation between the adjusted tax basis and the Gross Asset
Value of such property in the same manner as under Code Section 704(c).

                  (f)       Whenever the "value,""fair value" or "fair market
value" of Company property is to be determined, such "value" shall be
determined, and the assets and liabilities of the Company shall be valued, on
the following basis:

                            (i)      Marketable securities listed on national
securities exchanges or reported in the National Market System will be valued at
the last sale price on the stock exchange or market on which the security is
traded on the Determination Date or, if the security is traded on more than one
stock exchange or market on the Determination Date, at the last sale price on
the exchange or market on which such securities are principally traded on that
Date; in the absence of a sale on such Date, such securities will be valued at
the average of the closing high bid and low ask prices on such exchange or
market on the Determination Date.

                            (ii)     Marketable securities not so traded will be
valued at the last bid prices, reported by NASDAQ in the case of securities
quoted on NASDAQ, or by the National Quotations Bureau, Inc. in the case of any
other such securities.

                           (iii)     Short term money market instruments and
bank deposits will be valued at cost plus reported interest to date.

                           (iv)      All other assets and liabilities of the
Company will be valued at the fair value thereof as determined in good faith by
the Manager. In addition, and notwithstanding (i) and (ii) above, valuations of
portfolio securities which are restricted as to saleableness or transferability
will be effected as provided in (i) and (ii), above, less a discount of from ten
percent (10%) to twenty-five percent (25%) of the value thereof as determined in
good faith by the Manager based on the volatility of the security involved and
the nature and length of the restriction. In addition, interests in other
partnerships or companies such as the Company shall be valued by such
partnership or company at the


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<PAGE>   12

times and upon the terms and conditions provided in the partnership or operating
agreement thereof, unless otherwise determined by the Manager.

                           (v)       If the Determination Date is not a business
day, values as of the close of business on the last business day preceding such
Date may be used. All determinations of values will, except as provided above,
be accomplished by the Manager, whose determination thereof shall be conclusive
and binding.

         I.19     "INTEREST" shall mean any membership interest in the
Company.

         I.20     "MAJORITY INTEREST" shall mean those Members who hold
two-thirds of the Percentage Interests which all Members hold.

         I.21     "MANAGER" shall mean and refer to Sutro, as well as to any
other person that succeeds any such person as a manager of the Company.

         I.22     Reserved.

         I.23     "MEMBER" shall mean each Person who is an initial signatory
to this Agreement or has been admitted to the Company as a Member in accordance
with the Articles or this Agreement (including an Assignee who has become a
Member in accordance with Article VII), and (a) has not ceased to be a Member
for other reason, and the term includes each Manager who is a Member.

         I.24     "MEMBERSHIP INTEREST" shall mean a Member's entire interest
in the Company including the Member's Economic Interest, any right to vote, and
the right to receive information concerning the business and affairs of the
Company.

         I.25     "NONMANAGER MEMBER" shall mean any Member that is not also a
Manager.

         I.26     "PERCENTAGE INTEREST" shall mean for each Member or Economic
Interest Owner as of a given date, the ratio of such Member's Capital Account to
the Capital Accounts of all Members as of such date.

         I.27     "PERSON" shall mean an individual, partnership, limited
partnership, limited liability company, corporation, trust, estate, association
or any other entity.

         I.28     "PROFITS" and "LOSSES" shall mean, for each Fiscal Year or
Fiscal Period, an amount equal to the Company's taxable income or loss for such
Fiscal Year or Fiscal Period, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:


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                  (a)       Any income of the Company that is exempt from
Federal income tax and not otherwise taken into account in computing Profit or
Loss pursuant to this Section 1.28 shall be added to such taxable income or
loss;

                  (b)       Any expenditures of the Company described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Profit and Loss pursuant to this Section 1.28 shall be
subtracted from such taxable income or loss;

                  (c)       If the Gross Asset Value of any company asset is
adjusted pursuant to Paragraphs 1.18(b) or 1.18(d), the amount of such
adjustment shall be taken into account as gain or loss from the disposition of
such asset for purposes of computing Profit and Loss;

                  (d)       Gain or loss resulting from any disposition of
Company property with respect to which gain or loss is recognized for Federal
income tax purposes shall be computed by reference to the Gross Asset Value of
the Company property disposed of, notwithstanding that the adjusted tax basis of
such property differs from its Gross Asset Value;

                  (e)       In lieu of the depreciation, amortization and other
cost recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Fiscal Year or
Fiscal Period, computed in accordance with Section 1.12; and

                  (f)       Notwithstanding any other provision of this Section
1.28, any items that are specially allocated pursuant to Paragraphs 6.3A, 6.3B
or 6.3D shall not be taken into account in computing Profit and Loss.

         I.29     "REGULATIONS" shall, unless the context clearly indicates
otherwise, mean the regulations in force as final or temporary that have been
issued by the U.S. Department of Treasury pursuant to its authority under the
Code, and any successor regulations.

         I.30     "REMAINING MEMBERS" shall have the meaning ascribed to it in
Article VIII.

         I.31     "SUTRO" shall mean The Sutro Group, a Nevada corporation.

         I.32     "TAX MATTERS PARTNER" (as defined in Code Section 6231) shall
be The Sutro Group or its successor as designated pursuant to Section 9.6.

         I.33     "TARGETED INVESTMENT" means Fountain View, Inc., a Delaware


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corporation.

                                   ARTICLE II

                             ORGANIZATIONAL MATTERS

         II.1     FORMATION. The Members have formed a Delaware limited
liability company under the laws of the State of Delaware by filing the Articles
with the Delaware Secretary of State and entering into this Agreement. The
rights and liabilities of the Members shall be determined pursuant to the Act
and this Agreement. To the extent that the rights or obligations of any Member
are different by reason of any provision of this Agreement than they would be in
the absence of such provision, this Agreement shall, to the extent permitted by
the Act, control.

         II.2     NAME. The name of the Company shall be Sutro Investment
Partners V, LLC." The business of the Company may be conducted under that name
or, upon compliance with applicable laws, any other name that the Manager deem
appropriate or advisable. The Manager shall file any fictitious name
certificates and similar filings, and any amendments thereto, that the Manager
considers appropriate or advisable.

         II.3     TERM. The term of this Agreement commenced on the filing of
the Articles and shall continue until terminated as hereinafter provided.

         II.4     OFFICE AND AGENT.

                  A.       PRINCIPAL OFFICE. The principal office of the Company
shall be located at 3773 Howard Hughes Parkway, Suite 190 South, Las Vegas,
Nevada, 89109, unless and until the Manager shall determine otherwise, and the
Manager may determine to establish such additional offices to be located at such
place or places inside or outside the State of Delaware as the Manager may
designate from time to time.

                  B.       REGISTERED OFFICE. The Registered Office of the
Company in the State of Delaware is located at 1013 Centre Road, in the City of
Wilmington, County of New Castle. The registered agent of the Company for
service of process at such address is Paracorp Incorporated.

                  C.       OTHER JURISDICTIONS. The Company shall file or record
such documents and take such other actions under the laws of any jurisdiction
outside the State of Delaware as are necessary or desirable to permit the
Company to do business in any such jurisdiction as is selected by the Manager
and to promote the limitation of liability for the Members in any such
jurisdiction.

         II.5     PURPOSE AND BUSINESS OF THE COMPANY. The Company was formed to
acquire, own, hold for investment and otherwise dispose of securities, including
to invest


                                       8
<PAGE>   15

in the Targeted Investment, and to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to, or convenient for the furtherance
and accomplishment of such business, objectives, and purpose, but subject to the
provisions of Paragraph 5.3B hereof.

                                   ARTICLE III

                              CAPITAL CONTRIBUTIONS

         III.1    CAPITAL CONTRIBUTIONS OF THE MANAGER. The Manager shall be
required to contribute to the capital of the Company the amount set forth for it
as of the date hereof on Exhibit A, and the Manager shall be admitted as a
Member in respect of any Capital Contribution which it makes.

         III.2    CAPITAL CONTRIBUTIONS OF NONMANAGER MEMBERS. Each other Member
shall contribute to the capital of the Company the amount set forth for it on
Exhibit A hereto.

         III.3    TIMING; OTHER CONTRIBUTIONS. The Capital Contributions called
for by Sections 3.1 and 3.2 hereof shall be made pro rata by each Member so as
to permit the Company to meet its obligations to the Targeted Investment on a
timely basis, and the Members shall also make pro rata such additional Capital
Contributions as shall enable the Company to meet such additional obligations,
if any, which might arise in respect of capital contributions to the Targeted
Investment. No person shall be permitted to make any Capital Contribution except
as permitted pursuant to the provisions of this Agreement.

         III.4    FAILURE TO MAKE CONTRIBUTIONS. If a Member does not timely
contribute capital when required, that Member shall be in default under this
Agreement. In such event, the Manager shall sent the defaulting Member written
notice of such default, giving him or her fourteen (14) days from the date such
notice is given to contribute the entire amount of his or her required Capital
Contribution (if the defaulting Member did not make a required contribution of
property or services, the Company may instead require the defaulting Member to
contribute cash equal to that portion of the fair market value of the
contribution that has not been made). If the defaulting Member does not
contribute his or her required capital to the Company within said fourteen
(14)-day period, the Manager or those non-defaulting Members who hold a Majority
Interest if the defaulting Member is the Manager may elect any one or more of
the following remedies:

                  (a)       The non-defaulting Members may advance funds to the
Company to cover those amounts which the defaulting Member fails to contribute.
Amounts which a non-defaulting Member so advances on behalf of the defaulting
Member shall become a loan due and owing from the defaulting Member to such
non-defaulting Member and bear interest at the rate of ten percent (10%) per
annum, payable monthly. All cash contributions otherwise distributable to the
defaulting member under this


                                       9
<PAGE>   16

Agreement shall instead be paid to the non-defaulting Members making such
advances until such advances and interest thereon are paid in full. In any
event, any such advances shall be evidenced by a promissory note and be due and
payable by the defaulting Member one (1) year from the date that such advance
was made. Any amounts repaid shall first be applied to interest and thereafter
to principal. Effective upon a Member becoming a defaulting Member, each member
grants to the non-defaulting Members who advance funds under this Paragraph
3.4(a) a security interest in his or her Economic Interest to secure his or her
obligation to repay such advances and agrees to execute and deliver a promissory
note as described herein together with a security agreement and such UCC-1
financing statements and assignments of certificates of membership (or other
documents of transfer) as such non-defaulting Members may reasonably request.

                  (b)       The Percentage Interests shall be adjusted, in which
event each member's Percentage Interest shall be a fraction, the numerator of
which represents the aggregate amount of such Member's Capital Contributions and
the denominator of which represents the sum of all Members' Capital
Contributions.

                  (c)       The defaulting Members shall have no right to
receive any distributions from the Company until the non-defaulting members have
first received distributions in an amount equal to the additional capital
contributed by each non-defaulting Member to the Company plus a cumulative,
non-compounded return thereon at the rate of ten percent (10%) per annum.

                  (d)       The defaulting Member shall lose his or her voting
and approval rights under the Act, the Articles and this Agreement.

                  (e)       The defaulting Member shall lose his or her ability
(whether as a Member or a Manager) to participate in the management and
operations of the Company.

                  (f)       The Company may obtain a money judgement against the
defaulting Member.

         Each Member acknowledges and agrees that (i) a default by any Member in
making a required Capital Contribution will result in the Company and the
non-defaulting Members incurring certain costs and other damages in an amount
that would be extremely difficult or impractical to ascertain and (ii) the
remedies described in this Section 3.4 bear a reasonable relationship to the
damages which the Members estimate may be suffered by the Company and the
non-defaulting Members by reason of the failure of a defaulting Member to make
any required Capital Contribution and the election of any or all of the above
described remedies is not unreasonable under the circumstances existing as of
the date hereof.

         The election of the Manager or non-defaulting Members, as applicable,
to pursue


                                       10
<PAGE>   17

any remedy provided in this Section 3.4 shall not be a waiver or limitation of
the right to pursue an additional or different remedy available hereunder or of
law or equity with respect to any subsequent default.

         III.5    NO INTEREST. No Member shall be entitled to receive any
interest on his or her Capital Contributions.

                                   ARTICLE IV

                                     MEMBERS

         IV.1     LIMITATIONS ON LIABILITY OF MEMBERS. The debts, obligations
and liabilities of the Company, whether arising in contract, tort or otherwise,
shall be solely the debts, obligations and liabilities of the Company, and no
Member of the Company shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Member or by
reason of such Member's acts or omissions in connection with the conduct of the
business of the Company.

         IV.2     LIABILITY OF MEMBERS TO THE COMPANY.

                  A.       LIABILITY OF MEMBERS TO THE COMPANY. A Member is
liable to the Company: (i) for the difference between his or its contribution to
capital as actually made and that is stated in the Articles, this Agreement or
other document executed by the Member as having been made by the Member; and
(ii) for any unpaid Capital Contribution which he or it agreed in the Articles,
this Agreement or other document executed by the Member to make in the future at
the time and on the conditions stated in the Articles, Agreement or other
document evidencing such agreement. No Member shall be excused from an
obligation to the Company to perform any promise to contribute money, property
or to perform services because of death, disability, dissolution or any other
reason.

                  B.       MEMBER AS TRUSTEE FOR THE COMPANY. A Member holds as
trustee for the Company (i) specific property stated in the Articles, Agreement
or other document executed by the Member as contributed by such Member, but
which was not contributed or which has been wrongfully or erroneously returned;
and (ii) money or other property wrongfully paid or conveyed to such Member on
account of his or its Capital Contribution.

                  C.       WAIVER OF LIABILITY OF MEMBER. The liabilities of a
Member as set out in this Section 4.2 can be waived or compromised only by the
consent of all Members; but a waiver or compromise shall only affect the right
of a creditor of the Company to the extent permitted by applicable law.

         IV.3     ADMISSION OF ADDITIONAL MEMBERS. The Manager may admit to the
Company additional Members, from time to time, only as expressly provided in
this


                                       11
<PAGE>   18

Agreement, including pursuant Article VII hereof, and the Members shall not be
permitted to admit new Members, except as otherwise expressly provided in this
Agreement.

         IV.4     WITHDRAWALS OR RESIGNATIONS. No Member may withdraw or resign
from the Company, except as otherwise provided in this Agreement.

         IV.5     TRANSACTIONS WITH THE COMPANY. Subject to any limitations set
forth in this Agreement and with the prior approval of the Manager, a Member may
lend money to and transact other business with the Company. Subject to other
applicable law, such Member has the same rights and obligations with respect
thereto as a Person who is not a Member.

         IV.6     REMUNERATION TO MEMBERS. Except as otherwise specifically
provided in this Agreement, no Member is entitled to remuneration for acting in
the Company business.

         IV.7     MEMBERS ARE NOT AGENTS.Pursuant to Section 5.1, the management
of the Company is vested in the Manager. The Members shall have no power to
participate in the management of the Company except as expressly authorized by
this Agreement or the Articles and except as expressly required by the Act. No
Member, acting solely in the capacity of a Member, is an agent of the Company
nor does any Member, unless expressly and duly authorized in writing to do so by
the Manager, have any power or authority to bind or act on behalf of the Company
in any way, to pledge its credit, to execute any instrument on its behalf or to
render it liable for any purpose.

         IV.8     VOTING RIGHTS. Except as expressly provided in this Agreement
or the Articles, Members shall have no voting, approval or consent rights.

         IV.9     MEETINGS OF MEMBERS.

                  A.       DATE, TIME AND PLACE OF MEETINGS OF MEMBERS;
SECRETARY. Meetings of Members may be held at such date, time and place within
or without the State of Delaware as the Manager may fix from time to time. No
annual or regular meetings of Members are required. At any Members' meeting, the
Manager shall appoint a person to preside at the meeting and a person to act as
secretary of the meeting. The secretary of the meeting shall prepare minutes of
the meeting which shall be placed in the minute books of the Company.

                  B.       POWER TO CALL MEETINGS. Meetings of the Members may
be called by the Manager, or upon written demand of Members holding more than
ten percent (10%) of the Percentage Interests, for the purpose of addressing any
matters on which the Members may vote.

                  C.       NOTICE OF MEETING. Written notice of a meeting of
Members shall


                                       12
<PAGE>   19

be sent or otherwise given to each Member not less than ten (10) nor more than
sixty (60) days before the date of the meeting. The notice shall specify the
place, date and hour of the meeting and the general nature of the business to be
transacted. No other business may be transacted at this meeting. Upon written
request to the Manager by any person entitled to call a meeting of Members, the
Manager shall immediately cause notice to be given to the Members entitled to
vote that a meeting will be held at a time requested by the person calling the
meeting, not less than ten (10) days nor more than sixty (60) days after the
receipt of the request. If the notice is not given within twenty (20) days after
the receipt of the request, the person entitled to call the meeting may give the
notice.

                  D.       MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. Notice
of any meeting of Members shall be given either personally or by first-class
mail or telegraphic or other written communication, charges prepaid, addressed
to the Member at the address of that Member appearing on the books of the
Company or given by the Member to the Company for the purpose of notice. If no
such address appears on the Company's books or is given, notice shall be deemed
to have been given if sent to that Member by first-class mail or telegraphic or
other written communication to the Company's principal executive office, or if
published at least once in a newspaper of general circulation in the county
where that office is located. Notice shall be deemed to have been given at the
time when delivered personally or deposited in the mail or sent by telegram or
other means of written communication.

                           If any notice addressed to a Member at the address of
that Member appearing on the books of the Company is returned to the Company by
the United States Postal Service marked to indicate that the United States
Postal Service is unable to deliver the notice to the Member at that address,
all future notices or reports shall be deemed to have been duly given without
further mailing if these shall be available to the Member on written demand of
the Member at the principal executive office of the Company for a period of one
year from the date of the giving of the notice.

                           An affidavit of the mailing or other means of giving
any notice of any meeting shall be executed by the Manager giving the notice,
and shall be filed and maintained in the minute book of the Company.

                  E.       VALIDITY OF ACTION. Any action approved at a meeting,
other than by unanimous approval of those entitled to vote, shall be valid only
if the general nature of the proposal so approved was stated in the notice of
meeting or in any written waiver of notice.

                  F.       QUORUM. The presence in person or by proxy of a
Majority Interest shall constitute a quorum at a meeting of Members.

                  G.       ADJOURNED MEETING; NOTICE. Any Members' meeting,
whether or


                                       13
<PAGE>   20

not a quorum is present, may be adjourned from time to time by the vote of the
majority of the Membership Interests represented at that meeting, either in
person or by proxy, but in the absence of a quorum, no other business may be
transacted at that meeting. When any meeting of Members is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time and
place are announced at a meeting at which the adjournment is taken, unless a new
record date for the adjourned meeting is subsequently fixed, or unless the
adjournment is for more than forty-five (45) days from the date set for the
original meeting, in which case the Manager shall set a new record date. At any
adjourned meeting the Company may transact any business which might have been
transacted at the original meeting.

                  H.       WAIVER OF NOTICE OR CONSENT. The actions taken at any
meeting of Members however called and noticed, and wherever held, have the same
validity as if taken at a meeting duly held after regular call and notice, if a
quorum is present either in person or by proxy, and if, either before or after
the meeting, each of the Members entitled to vote, who was not present in person
or by proxy, signs a written waiver of notice or consents to the holding of the
meeting or approves the minutes of the meeting. All such waivers, consents or
approvals shall be filed with the Company records or made a part of the minutes
of the meeting.

                           Attendance of a person at a meeting shall constitute
a waiver of notice of that meeting, except when the person objects, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened, and except that attendance at a meeting is
not a waiver of any right to object to the consideration of matters not included
in the notice of the meeting if that objection is expressly made at the meeting.
Neither the business to be transacted nor the purpose of any meeting of Members
need be specified in any written waiver of notice except as provided in
Paragraph 4.10E.

                  I.       ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any
action that may be taken at a meeting of Members may be taken without a meeting,
if a consent in writing setting forth the action so taken, is signed and
delivered to the Company within sixty (60) days of the record date for that
action by Members having not less than the minimum number of votes that would be
necessary to authorize or take that action at a meeting at which all Members
entitled to vote on that action at a meeting were present and voted. All such
consents shall be filed with the Manager or the secretary, if any, of the
Company and shall be maintained in the Company records. Any Member giving a
written consent, or the Member's proxy holders, may revoke the consent by a
writing received by the Manager or secretary, if any, of the Company before
written consents of the number of votes required to authorize the proposed
action have been filed.

                           Unless the consents of all Members entitled to vote
have been solicited in writing, (i) notice of any Member approval of an
amendment to the Articles or this Agreement, a dissolution of the Company, or a
merger of the Company, without a


                                       14
<PAGE>   21

meeting by less than unanimous written consent, shall be given at least ten (10)
days before the consummation of the action authorized by such approval, and (ii)
prompt notice shall be given of the taking of any other action approved by
Members without a meeting by less than unanimous written consent, to those
Members entitled to vote who have not consented in writing.

                  J.       TELEPHONIC PARTICIPATION BY MEMBER AT MEETINGS.
Members may participate in any Members' meeting through the use of any means of
conference telephones or similar communications equipment as long as all Members
participating can hear one another. A Member so participating is deemed to be
present in person at the meeting.

                  K.       RECORD DATE. In order that the Company may determine
the Members of record entitled to notices of any meeting or to vote, or entitled
to receive any distribution or to exercise any rights in respect of any
distribution or to exercise any rights in respect of any other lawful action,
the Manager, or Members representing more than ten percent (10%) of the
Percentage Interests may fix, in advance, a record date, that is not more than
sixty (60) days nor less than ten (10) days prior to the date of the meeting and
not more than sixty (60) days prior to any other action. If no record date is
fixed:

                           (i)      The record date for determining Members
entitled to notice of or to vote at a meeting of Members shall be at the close
of business on the business day next preceding the day on which notice is given
or, if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held.

                           (ii)     The record date for determining Members
entitled to give consent to Company action in writing without a meeting shall be
the day on which the first written consent is given.

                           (iii)    The record date for determining Members for
any other purpose shall be at the close of business on the day on which the
Manager adopts the resolution relating thereto, or the sixtieth (60th) day prior
to the date of the other action, whichever is later.

                           (iv)     The determination of Members of record
entitled to notice of or to vote at a meeting of Members shall apply to any
adjournment of the meeting unless the Manager or the Members who called the
meeting fix a new record date for the adjourned meeting, but the Manager or the
Members who called the meeting shall fix a new record date if the meeting is
adjourned for more than forty-five (45) days from the date set for the original
meeting.

                  L.       PROXIES. Every Member entitled to vote on any matter
shall have the right to do so either in person or by one or more agents
authorized by a written proxy


                                       15
<PAGE>   22

signed by the person and filed with the Manager or secretary, if any, of the
Company. A proxy shall be deemed signed if the Member's name is placed on the
proxy (whether by manual signature, typewriting, telegraphic transmission,
electronic transmission or otherwise) by the Member or the Member's attorney in
fact. A validly executed proxy which does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the person executing it,
before the vote pursuant to that proxy, by a writing delivered to the Company
stating that the proxy is revoked, or by a subsequent proxy executed by, or
attendance at the meeting and voting in person by, the person executing the
proxy; or (ii) written notice of the death or incapacity of the maker of that
proxy is received by the Company before the vote pursuant to that proxy is
counted.

         IV.10    CERTIFICATE OF MEMBERSHIP INTEREST. Unless the Manager
otherwise elects, a Membership Interest shall not be represented by a
certificate of membership.

                                    ARTICLE V

                      MANAGEMENT AND CONTROL OF THE COMPANY

         V.1      MANAGEMENT OF THE COMPANY BY MANAGER. The business, property
and affairs of the Company shall be managed exclusively by the Manager. Except
for situations in which the approval of the Members is expressly required by the
Articles or this Agreement, the Manager shall have full, complete and exclusive
authority, power, and discretion to manage and control the business, property
and affairs of the Company, to make all decisions regarding those matters and to
perform any and all other acts or activities customary or incident to the
management of the Company's business, property and affairs. A Manager need not
be a Member.

         V.2      RESIGNATION AND REMOVAL OF MANAGER. No Manager may resign as
Manager at any time without the consent of a Majority Interest of the Members
other than the departing Manager. A Manager may be removed at any time, with
Cause (but may not be removed without Cause), by the unanimous vote of all of
the Members (other than the Member who is to be removed as Manager) at a meeting
called expressly for that purpose, or by the written consent of all of the
Members (other than the Member who is to be removed as Manager). Removal as
Manager shall not affect the Manager's rights as a Member or constitute a
withdrawal of a Manager as a Member. For purpose of this Section 5.2, "Cause"
shall mean fraud, gross negligence, willful misconduct, embezzlement or a breach
of such Manager's obligations under this Agreement.

         V.3      POWERS OF MANAGERS.

                  A.       POWERS OF MANAGERS. Without limiting the generality
of Section 5.1, but subject to Paragraph 5.3B and to the express limitations set
forth elsewhere in this Agreement, the Manager shall have all necessary powers
to manage and carry out the purposes, business, property, and affairs of the
Company.


                                       16
<PAGE>   23

                  B.       LIMITATIONS ON POWER OF MANAGERS. Notwithstanding any
other provisions of this Agreement, the Manager shall not have authority
hereunder to cause the Company to engage in the following transactions without
first obtaining the affirmative vote or written consent of all of the Members
and of the Manager, except that the matters specified in (v) and (xiii) shall
just require the vote of a Majority Interest and the concurrence of the Manager.

                           (i)      The sale, exchange or other disposition of
all, or substantially all, of the Company's assets occurring as part of a single
transaction or plan or as part of related transactions or plans, except in the
ordinary course of business or in the orderly liquidation and winding up of the
business of the Company upon its duly authorized dissolution;

                           (ii)     The merger of the Company with another
limited liability company or limited partnership or corporation, general
partnership or other Person;

                           (iii)    The establishment of different classes of
Members;

                           (iv)     An alteration of the primary purpose or
business of the Company as set forth in Section 2.5;

                           (v)      Transactions between the Company and the
Manager or one or more of the Manager's Affiliates, or transactions in which the
Manager or one or more of the Manager's Affiliates, has a material financial
interest shall require the affirmative vote or written consent of a Majority
Interest (not including the Manager, if a Member);

                           (vi)     Any act which would make it impossible to
carry on the ordinary business of the Company;

                           (vii)    Borrowing, except that if it is in the
Manager's reasonable judgement desirable to do so to accomplish the purposes of
the Company, the Company may borrow money from banks or other recognized
financial institutions and secure payment of any such borrowing by hypothecation
or pledge of Company properties or otherwise, provided that (i) any such
borrowing has an original maturity of less than one (1) year and (ii) the
aggregate of all indebtedness of the Company for money borrowed and outstanding
at any one time does not exceed five percent (5%) of the sum of all Capital
Contributions, and provided that the Manager may only cause the Company to
guaranty the obligations of others if the amount guaranteed, together with any
amount borrowed, does not at any time exceed the aforesaid limitation as to
borrowing upon the authority of the Manager;

                           (viii)   The underwriting or participation (except as
an investor) in the marketing of securities of any other company;


                                       17
<PAGE>   24

                           (ix)     The buying or selling of commodities, other
than stock index futures;

                           (x)      The buying or selling of real estate;

                           (xi)     Investing the Company's assets directly in
the securities of any issuer other than the Targeted Investment;

                           (xii)    Purchasing securities issued by the Manager
or any affiliate thereof.

                           (xiii)   Engaging in any other transaction described
in this Agreement as requiring the vote, consent, or approval of the Members.

         V.4      PERFORMANCE OF DUTIES; LIABILITY OF MANAGER. The Manager shall
not be liable to the Company or to any Member for any loss or damage sustained
by the Company or any Member, unless the loss or damage shall have been the
result of fraud, deceit, gross negligence, reckless or intentional misconduct,
or a knowing violation of law by the Manager. The Manager shall perform its
managerial duties in good faith, in a manner they reasonably believe to be in
the best interests of the Company and its Members, and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use
under similar circumstances. The Manager who so performs the duties of Manager
shall not have any liability by reason of being or having been a Manager of the
Company. Notwithstanding the foregoing, it is understood and agreed that the
Federal securities laws impose liabilities under certain circumstances on
persons who act in good faith, and, therefore, nothing herein shall in any way
be deemed to constitute a waiver or limitation of any rights which a Member may
have under any Federal securities laws

                  In performing its duties, the Manager shall be entitled to
rely on information, opinions, reports, or statements, including financial
statements and other financial data, of the following persons or groups unless
they have knowledge concerning the matter in question that would cause such
reliance to be unwarranted and provided that the Manager acts in good faith and
after reasonable inquiry when the need therefor is indicated by the
circumstances:

                           (i)      One or more employees or other agents of the
Company whom the Manager reasonably believe to be reliable and competent in the
matters presented; or

                           (ii)     Any attorney, independent accountant, or
other person as to matters which the Manager reasonably believes to be within
such person's professional or expert competence.


                                       18
<PAGE>   25

         V.5      PAYMENTS TO MANAGERS. Except as expressly provided in this
Agreement, no Manager or Affiliate of a Manager is entitled to remuneration for
services rendered or goods provided to the Company. The Manager shall not be
entitled to any management fee or other compensation; provided, however, that
the Company shall reimburse the Manager for all expenses incurred by the Manager
in conducting the Company's business, and all direct disbursements made and
obligations incurred on behalf of the Company, including the Company's trading,
custodial, borrowing, legal, accounting, documentation, reporting and auditing
expenses.

         V.6      LIMITED LIABILITY. No person who is a Manager of the Company
shall be personally liable under any judgement of a court, or in any other
manner, for any debt, obligation, or liability of the Company, whether that
liability or obligation arises in contract, tort, or otherwise, solely by reason
of being a Manager.

         V.7      MEMBERSHIP INTERESTS OF MANAGER. Except as otherwise provided
in this Agreement, Membership Interests held by the Manager as a Member shall
entitle the Manager to all the rights of a Member, including without limitation
the economic, voting, information and inspection rights of a Member.

                                   ARTICLE VI

                ALLOCATIONS OF PROFITS AND LOSSES; DISTRIBUTIONS

         VI.1     CAPITAL ACCOUNTS. Individual Capital Accounts shall be
maintained in accordance with Section 1.7.

         VI.2     ALLOCATIONS. Profits and Losses shall be allocated to the
Members for each period described as follows:

                  A.       PROFITS AND LOSSES. Profits and Losses for each
Fiscal Period shall be allocated to the Members in proportion to their
respective Percentage Interests as of the first day of such Fiscal Period.

                  B.       RECAPTURE. Anything herein to the contrary
notwithstanding, any recapture under applicable tax laws shall be allocated to
the Members in the same proportions as the item generating the recapture shall
have been allocated.

         VI.3     SPECIAL CAPITAL ACCOUNT ALLOCATIONS. Notwithstanding the
allocation provisions of Section 6.2, the following special allocations shall be
made in allocating Profits and Losses:

                  A.       SECTION 704 ALLOCATIONS. Any special allocations
necessary to comply with the requirements set forth in Section 704 of the Code
and the


                                       19
<PAGE>   26

corresponding Regulations, including the qualified income offset and minimum
gain chargeback provisions contained therein, shall be made.

                  B.       TAX ALLOCATIONS.

                           (i)      Subject to clause 6.3B(ii) below, in each
Fiscal Year, items of income, deduction, gain, loss or credit that are
recognized for income tax purposes shall be allocated among the Members in such
manner as to reflect equitably amounts credited to or debited against the
Capital Account of each member, whether in such Fiscal Year or in prior Fiscal
Years. To this end, the Company shall establish and maintain records that shall
show the extent to which the Capital Account of each member shall, as of the
last day of each Fiscal Year, be comprised of amounts that have not been
reflected in the taxable income of such Member. To the extent deemed by the
Manager to be feasible and equitable, taxable income and gains in each Fiscal
Year shall be allocated among the Members who have enjoyed the related credits,
and items of deduction, loss and credit in each Fiscal Year shall be allocated
among the Members who have borne the burden of the related debits.

                           (ii)     Notwithstanding any of the foregoing
provisions to the contrary, if a Member withdraws capital during a Fiscal Year,
allocations of taxable income and loss may, in the exclusive discretion of the
Manager, be made as follows:

                                    (a)     Taxable income may be allocated
first, to each Member who shall have withdrawn all or part of such Member's
Capital Account in that Fiscal Year, to the extent that such withdrawal exceeds
such member's adjusted tax basis in such Member's interest in the Company
immediately prior to such withdrawal. If more than one Capital Account shall
have been so withdrawn in full or in part, such allocations, if made, shall be
made to the extent of and in proportion to such differences;

                                    (b)     Taxable loss may first be allocated
to each member who shall have withdrawn all of such Member's Capital Account in
that Fiscal Year, to the extent that such Member's adjusted tax basis in such
Member's interest in the Company exceeds that Capital Account immediately prior
to such withdrawal. If more than one Capital Account has been so withdrawn, such
allocations of taxable loss, if made, shall be made to the extent of and in
proportion to such differences; and

                                    (c)     Thereafter, taxable income and loss
shall be allocated as provided in clause 6.3B(i) above.

The Manager, in its exclusive discretion, may cause the Company to make the
election to adjust the basis of the Company property under Code Section 754. In
any year in which the Code Section 754 election is in effect, this clause
6.3B(ii) shall be null and void.

                           (iii)    Any elections or other decisions relating to
such allocations


                                       20
<PAGE>   27

shall be made by the Manager in any manner that reasonably reflects the purpose
and intention of this Agreement. Allocations pursuant to this Paragraph 6.3B are
solely for purposes of Federal, state and local taxes and shall not affect, or
in any way be taken into account in computing, any Capital Account or share of
Profits, Losses or other items of any Member, or distributions to any Member,
pursuant to any provision of this Agreement.

                  C.       OTHER ALLOCATION RULES.

                           (i)      Generally, all Profits and Losses shall be
allocated among the Members as provided in Section 6.2 and this Section 6.3. If
Members are admitted to the Company on different dates during any Fiscal Year,
the Profits or Losses allocated among the Members for each such Fiscal Year
shall be allocated in proportion to their respective Capital Accounts from time
to time during such Fiscal Year in accordance with Code Section 706, using any
convention permitted by law and selected by the Manager.

                           (ii)     For purposes of determining the Profits,
Losses or any other items allocable to any period, Profits, Losses and any such
other items shall be determined on a daily, monthly or other basis, as
determined by the Manager using any permissible method under Code Section 706
and the Regulations thereunder.

                           (iii)    Notwithstanding any of the foregoing
provisions to the contrary, if taxable gain to be allocated includes income
resulting from the sale or disposition of Company property or property of a
limited partnership or joint venture in which the Company owns an interest that
is treated as ordinary income, such gain so treated as ordinary income shall be
allocated to and reported by each Member in proportion to allocations to that
Member of the items that gave rise to such ordinary income, and the Company
shall keep records of such allocations. In the event of the subsequent admission
of any new Member, any item that would constitute "unrealized receivables" under
Code Section 751 and the Regulations thereunder shall not be shared by the newly
admitted Members, but rather shall remain allocated to existing Members.

                  D.       PROVISIONAL ALLOCATION. If any amount claimed by the
Company to constitute a deductible expense in any Fiscal Year is treated by any
Federal, state or local taxing authority as a payment made to a Member in such
Member's capacity as a member of the Company for income tax purposes, with
regard to such authority, items of income and gain of the Company for such
Fiscal Year shall first be allocated to such member to the extent of such
payment.

         VI.4     WITHDRAWALS FROM CAPITAL ACCOUNTS. No Member shall, except as
provided in Section 6.5 below, have the right to withdraw any amount from its
Capital Account without the consent of both the Manager and a Majority Interest
of the Members other than the withdrawing Member.


                                       21
<PAGE>   28

         VI.5     DISTRIBUTIONS. From time to time, as the Manager in its sole
and absolute discretion shall determine, the Manager may distribute cash or
other property to the Members in proportion to their respective Capital
Accounts; with it being understood, however, that the Manager shall have the
absolute right to cause the Company to retain, invest and reinvest any and all
cash or other assets, including the proceeds from sale or other disposition of
Company investments, that no such discretionary distributions shall be required
and that the Manager does not intend generally, if ever, to make such
distributions (although the Manager may, but shall not be required to, make
annual distributions to each Member in an amount which the Manager estimates
would enable the Members to pay Federal and state taxes generated by Company
allocations).

         VI.6     FORM OF DISTRIBUTION. A Member, regardless of the nature of
the Member's Capital Contribution, has no right to demand and receive any
distribution from the Company in any form other than money. Except as otherwise
expressly provided herein, Company distributions and redemptions may be made in
cash or in kind, in the discretion of the Manager, and the decision to effect
distributions in kind or in cash may be made independently of the tax
consequences of that decision on the Member receiving the distribution.
Distributions may be made to some Members in kind, notwithstanding that others
are simultaneously receiving cash.

         VI.7     RESTRICTION ON DISTRIBUTIONS.

                  A.       LIMITATION. No Distribution shall be made if, after
giving effect to the Distribution, all liabilities of the Company, other than
liabilities to Members on account of their Membership Interests and liabilities
for which the recourse of creditors is limited to specified property of the
Company, exceed the fair value of the assets of the Company, except that the
fair value of property that is subject to a liability for which the recourse of
creditors is limited shall be included in the assets of the Company only to the
extent that the fair value of that property exceeds that liability.

                  B.       LIABILITY FOR RETURN. A Member who receives a
distribution in violation of Paragraph 6.7A and who knew at the time of the
distribution that the distribution violated Paragraph 6.7A shall be liable to
the Company for the amount of the distribution. A Member who receives a
distribution in violation of Paragraph 6.7A and who did not know at the time of
the distribution that the distribution violated Paragraph 6.7A shall not be
liable for the amount of the distribution. Subject to Paragraph 6.7C, this
Paragraph 6.7B shall not affect any obligation or liability of a Member under
this Agreement or applicable law for the amount of a distribution.

                  C.       LIMITATION ON LIABILITY. A Member who receives a
distribution from the Company shall have no liability for the amount of the
distribution after the expiration of three (3) years from the date of the
distribution unless an action to recover the distribution from such Member is
commenced prior to the expiration of the said 3-year period and an adjudication
of liability against such Member is made in the said action.


                                       22
<PAGE>   29

         VI.8     RETURNED DISTRIBUTIONS. The amount of any distribution
returned to the Company by a Member or Economic Interest owner or paid by a
Member or Economic Interest owner for the account of the Company or to a
creditor of the Company shall be added to the account or accounts from which it
was subtracted when it was distributed to the Member or Economic Interest owner.

         VI.9     OBLIGATIONS OF MEMBERS TO REPORT ALLOCATIONS. The Members are
aware of the income tax consequences of the allocations made by this Article VI
and hereby agree to be bound by the provisions of this Article VI in reporting
their shares of Company income and loss for income tax purposes.

                                   ARTICLE VII

                      TRANSFER AND ASSIGNMENT OF INTERESTS

         VII.1    TRANSFER AND ASSIGNMENT OF INTERESTS. No Member shall be
entitled to transfer, assign, convey, sell, encumber or in any way alienate all
or any part of his or her Membership Interest (collectively, "transfer") except
with the prior written consent of the Manager, which consent may be given or
withheld, conditioned or delayed, as the Manager may determine in their sole and
absolute discretion. Transfers in violation of this Article VII shall only be
effective to the extent set forth in Section 7.7. After the consummation of any
transfer of any part of a Membership Interest, the Membership Interest so
transferred shall continue to be subject to the terms and provisions of this
Agreement and any further transfers shall be required to comply with all the
terms and provisions of this Agreement.

         VII.2    FURTHER RESTRICTIONS ON TRANSFER OF INTERESTS. In addition to
other restrictions found in this Agreement, no Member shall transfer, assign,
convey, sell, encumber or in any way alienate all or any part of his or her
Membership Interest: (i) without compliance with all Federal and state
securities law, (ii) if it would cause the Partnership to fail to qualify for
the exemption from the definition of "investment company" provided by Section
3(c)(1) of the Investment Company Act of 1940, as amended, or involve the resale
of Interests in increments or in a fashion which would cause the Company to lose
the safe harbor which is provided by Paragraph A of Revenue Notice 88-75 from
the definition of "publicly traded partnership" contained in Section 7704 of the
Code (and the Company shall not list the Interests on an established securities
market), or (iii) if the Membership Interest to be transferred, when added to
the total of all other Membership Interests transferred in the preceding twelve
(12) consecutive months prior thereto, would cause the tax termination of the
Company under Code Section 708(b)(1)(B).

         VII.3    SUBSTITUTION OF MEMBERS. An Assignee of a Membership Interest
shall have the right to become a substitute Member only if (i) the requirements
of Sections 7.1


                                       23
<PAGE>   30

and 7.2 relating to consent of the Manager and securities and tax requirements
hereof are met, (ii) the Assignee executes an instrument satisfactory to the
Manager accepting and adopting the terms and provisions of this Agreement, and
(iii) the Assignee pays any reasonable expenses in connection with his or her
admission as a new Member. The admission of an Assignee as a substitute Member
shall not result in the release of the Member who assigned the Membership
Interest from any liability that such Member may have to the Company.

         VII.4    PERMITTED TRANSFERS. The Economic Interest of any Member may
be transferred subject to compliance with Sections 7.2 and 7.3, but without the
prior written consent of the Manager as required by Section 7.1, by the Member
by inter vivos gift or by testamentary transfer to any spouse, parent, sibling,
in-law, child or grandchild of the Member, or to a trust for the benefit of the
Member or such spouse, parent, sibling, in-law, child or grandchild of the
Member.

         VII.5    EFFECTIVE DATE OF PERMITTED TRANSFERS. Any permitted transfer
of all or any portion of a Membership Interest or an Economic Interest shall be
effective as of the date provided in Section 6.3 following the date upon which
the requirements of Sections 7.1, 7.2 and 7.3 have been met. Any transferee of a
Membership Interest shall take subject to the restrictions on transfer imposed
by this Agreement.

         VII.6    RIGHTS OF LEGAL REPRESENTATIVES. If a Member who is an
individual dies or is adjudged by a court of competent jurisdiction to be
incompetent to manage the Member's person or property, the Member's executor,
administrator, guardian, conservator, or other legal representative may exercise
all of the Member's rights for the purpose of settling the Member's estate or
administering the Member's property, including any power the Member has under
the Articles or this Agreement to give an assignee the right to become a Member.
If a Member is a corporation, trust, or other entity and is dissolved or
terminated, the powers of that Member may be exercised by his or her legal
representative or successor.

         VII.7    NO EFFECT TO TRANSFERS IN VIOLATION OF AGREEMENT. Upon any
transfer of a Membership Interest in violation of this Article VII, the
transferee shall have no right to vote or participate in the management of the
business, property and affairs of the Company or to exercise any rights of a
Member. Such transferee shall only be entitled to become an Assignee and
thereafter shall only receive the share of one or more of the Company's Profits,
Losses and distributions of the Company's assets to which the transferor of such
Economic Interest would otherwise be entitled. Notwithstanding the immediately
preceding sentences, if, in the determination of the Manager, a transfer in
violation of this Article VII would cause the tax termination of the Company
under Code Section 708(b)(1)(B), the transfer shall be null and void and the
purported transferee shall not become either a Member or an Assignee.


                                       24
<PAGE>   31

                                  ARTICLE VIII

                       CONSEQUENCES OF DISSOLUTION EVENTS

         Upon the occurrence of a Dissolution Event as to the Manager, the
Company shall dissolve unless the remaining Members ("Remaining Members")
holding a majority of the Percentage Interests which all Remaining Members hold,
consent within ninety (90) days of the Dissolution Event to the continuation of
the business of the Company and to the election of a new Manager.

                                   ARTICLE IX

                    ACCOUNTING, RECORDS, REPORTING BY MEMBERS

         IX.1     BOOKS AND RECORDS. The books and records of the Company shall
be kept, and the financial position and the results of its operations recorded,
in accordance with the accounting methods followed for Federal income tax
purposes. The books and records of the Company shall reflect all the Company
transactions and shall be appropriate and adequate for the Company's business.
The Company shall maintain at its principal office in all of the following:

                  (a)      A current list of the full name and last known
business or residence address of each Member and Assignee set forth in
alphabetical order, together with the Capital Contributions, Capital Account and
Percentage Interest of each Member and Assignee;

                  (b)      A current list of the full name and business or
residence address of each Manager;

                  (c)      A copy of the Articles and any and all amendments
thereto together with executed copies of any powers of attorney pursuant to
which the Articles or any amendments thereto have been executed;

                  (d)      Copies of the Company's Federal, state, and local
income tax or information returns and reports, if any, for the six (6) most
recent taxable years;

                  (e)      A copy of this Agreement and any and all amendments
thereto together with executed copies of any powers of attorney pursuant to
which this Agreement or any amendments thereto have been executed;

                  (f)      Copies of the financial  statements of the Company,
if any, for the six (6) most recent Fiscal Years; and

                  (g)      The Company's books and records as they relate to the
internal


                                       25
<PAGE>   32

affairs of the Company for at least the current and past four (4) Fiscal Years.

         IX.2     DELIVERY TO MEMBERS AND INSPECTION.

                  A.       DELIVERY OF INFORMATION. Upon the request of any
Member or Assignee for purposes reasonably related to the interest of that
Person as a Member or Assignee, the Manager shall promptly deliver to the
requesting Member or Assignee, at the expense of the Company, a copy of the
information required to be maintained under Paragraphs 9.1(a), (b) and (d), and
a copy of this Agreement.

                  B.       INSPECTION AND COPYING. Each Member, Manager and
Assignee has the right, upon reasonable request for purposes reasonably related
to the interest of the Person as Member, Manager or Assignee, to:

                           (i)      inspect and copy during normal business
hours any of the Company records described in Paragraphs 9.1(a) through 9.1(g);
and

                           (ii)     obtain from the Manager, promptly after
their becoming available, a copy of the Company's Federal, state, and local
income tax or information returns for each Fiscal Year.

                  C.       RIGHT TO REQUEST. Any request, inspection or copying
by a Member or Assignee under this Section 9.2 may be made by that Person or
that Person's agent or attorney.

                  D.       COPIES OF AMENDMENTS. The Manager shall promptly
furnish to a Member a copy of any amendment to the Articles or this Agreement
executed by the Manager pursuant to a power of attorney from the Member.

         IX.3     ANNUAL STATEMENTS.

                  A.       DELIVERY OF STATEMENTS. Within one-hundred and fifty
(150) days after the end of each Fiscal Year, the Manager shall prepare, and
each Member shall be furnished with, an Annual Report of the Company which shall
contain the following:

                           (i)      a balance sheet as of the end of the Fiscal
Year and statements of income and expense, Members' equity, changes in financial
position and cash flow for the Year then ended, all of which shall be audited by
and accompanied by an audit report thereon of a certified public accountant or
by the certificate of the Manager stating that such financial statements were
prepared without audit from the Company's books and records;

                           (ii)     a report of the activities of the Company
during the Fiscal Year then ended; and


                                       26
<PAGE>   33

                           (iii)    a list of the Company's holdings and their
values.

                  B.       TAX INFORMATION. The Manager shall cause to be
prepared at least annually, at Company expense, information necessary for the
preparation of the Members' and Assignees' Federal and state income tax returns.
The Manager shall send or cause to be sent to each Member or Assignee within one
hundred and twenty (120) days after the end of each taxable year such
information as is necessary to complete Federal and state income tax or
information returns.

         IX.4     COMPANY ACCOUNTS. The Manager shall maintain the funds and
property of the Company with such Persons as the Manager may select.

         IX.5     ACCOUNTING DECISIONS AND RELIANCE ON OTHERS. All decisions as
to accounting matters, except as otherwise specifically set forth herein, shall
be made by the Manager. The Manager may rely upon the advice of their
accountants as to whether such decisions are in accordance with accounting
methods followed for Federal income tax purposes.

         IX.6     TAX MATTERS FOR THE COMPANY HANDLED BY MANAGER AND TAX MATTERS
PARTNER. The Manager shall from time to time cause the Company to make such tax
elections as they deem to be in the best interests of the Company and the
Members. The Tax Matters Partner shall represent the Company (at the Company's
expense) in connection with all examinations of the Company's affairs by tax
authorities, including resulting judicial and administrative proceedings, and
shall expend the Company funds for professional services and costs associated
therewith. The Tax Matters Partner shall oversee the Company tax affairs in the
overall best interests of the Company. If for any reason the Tax Matters Partner
can no longer serve in that capacity or ceases to be a Member or Manager, as the
case may be, the Manager may designate another to be Tax Matters Partner.

                                    ARTICLE X

                           DISSOLUTION AND WINDING UP

         X.1      DISSOLUTION. The Company shall be dissolved, its assets shall
be disposed of, and its affairs wound up on the first to occur of the following:

                  (a)      The entry of a decree of judicial dissolution;

                  (b)      The vote of a Majority Interest (which may include
the Manager) and the concurrence of the Manager; or

                  (c)      The occurrence of a Dissolution Event as to the last
remaining


                                       27
<PAGE>   34

Manager and the failure of the Remaining Members and to consent in accordance
with Article VIII to continue the business of the Company within ninety (90)
days after the occurrence of such event.

         X.2      CERTIFICATE OF DISSOLUTION. As soon as possible following the
occurrence of any of the events specified in Section 10.1, the Manager who has
not wrongfully dissolved the Company or, if none, the Members, shall execute a
Certificate of Dissolution in such form as shall be prescribed by the California
Secretary of State and file the Certificate as required by the Act.

         X.3      WINDING UP. Upon the occurrence of any event specified in
Section 10.1, the Company shall continue solely for the purpose of winding up
its affairs in an orderly manner, liquidating its assets, and satisfying the
claims of its creditors. The Manager who has not wrongfully dissolved the
Company or, if none, the Members, shall be responsible for overseeing the
winding up and liquidation of Company, shall take full account of the
liabilities of Company and assets, shall either cause its assets to be sold or
distributed, and if sold shall cause the proceeds therefrom, to the extent
sufficient therefor, to be applied and distributed as provided in Section 10.5.
The Persons winding up the affairs of the Company shall give written notice of
the commencement of winding up by mail to all known creditors and claimants
whose addresses appear on the records of the Company. The Manager or Members
winding up the affairs of the Company shall not be entitled to any compensation
for such services.

         X.4      DISTRIBUTIONS IN KIND. Any non-cash asset distributed to one
or more Members shall first be valued to determine the Profit or Loss that would
have resulted if such asset were sold for such value, such Profit or Loss shall
then be allocated pursuant to Article VI, and the Members' Capital Accounts
shall be adjusted to reflect such allocations. The amount distributed and
charged to the Capital Account of each Member receiving an interest in such
distributed asset shall be the value of such interest (net of any liability
secured by such asset that such Member assumes or takes subject to).

         X.5      ORDER OF PAYMENT UPON DISSOLUTION. After determining that all
known debts and liabilities of the Company, including, without limitation, debts
and liabilities to Members who are creditors of the Company, have been paid or
adequately provided for, the remaining assets shall be distributed to the
Members in accordance with their positive Capital Account balances, after taking
into account allocations for the Company's taxable year during which liquidation
occurs. Such liquidating distributions shall be made by the end of the Company's
taxable year in which the Company is liquidated, or, if later, within ninety
(90) days after the date of such liquidation.

         X.6      LIMITATIONS ON PAYMENTS MADE IN DISSOLUTION. Except as
otherwise specifically provided in this Agreement, each Member shall only be
entitled to look solely at the assets of the Company for the return of his or
her positive Capital Account balance and shall have no recourse for his or her
Capital Contribution and/or share of


                                       28
<PAGE>   35

Profits (upon dissolution or otherwise) against the Manager or any other Member.

         X.7      CERTIFICATE OF CANCELLATION. The Managers or Members who filed
the Certificate of Dissolution shall cause to be filed in the office of, and on
a form prescribed by, the California Secretary of State, a Certificate of
Cancellation of the Articles upon the completion of the winding up of the
affairs of the Company.

                                   ARTICLE XI

                                 INDEMNIFICATION

         XI.1     INDEMNIFICATION. Provided that (i) the person to be
indemnified was acting in good faith within what he reasonably believed to be
the scope of his employment or authority and for a purpose which he reasonably
believed to be in the furtherance of the purpose and best interests of the
Company or the Members, and (ii) the action or failure to act in which respect
of which indemnification is sought does not constitute negligence, willful
misconduct or violation of applicable law, the Manager and its Affiliates shall
be indemnified and held harmless by the Company from and against any and all
losses, liabilities, damages and expenses arising form claims, demands,
investigations, actions, suits or proceedings, whether civil, criminal or
administrative, in which it may be involved, as a party or otherwise, by reason
of its status as a Manager or Affiliate thereof, as the case may be, or any acts
or omissions by it, or the business or its or his management of the affairs of
the Company, whether or not it continues to be such at the time any such loss,
liability, damage or expense is paid or incurred. The rights of indemnification
provided in this Article XI are in addition to any rights to which the Manager
may otherwise be entitled by contract or as a matter of law and shall extend to
its successors and assigns and apply to the fullest extent permitted under the
Act, the Employee Retirement Income Security Act of 1974, as amended, the
Federal securities laws or any other applicable statute. In particular, and
without limitation of the foregoing, the Manager shall be entitled to
indemnification by the Company against reasonable expenses (as incurred),
including attorneys' fees actually and necessarily incurred, by the Manager in
connection with the defense of any action to which the Manager may be a party,
and as to which it shall be entitled to indemnification hereunder, including any
derivative or similar action elating to the right of the Company to procure a
judgement in its favor.

         XI.2     SUCCESSORS AND ASSIGNS; LIMITATIONS. This Article XI shall
inure to the benefit of the Manager, its shareholders, partners, employees and
agents, the employees and agents of the Company, including Affiliates of the
Manager, and their respective heirs, executors, administrators, successors and
assigns.


                                       29
<PAGE>   36

                                   ARTICLE XII

                              COMPETING ACTIVITIES

         The Manager need not devote all of its business time to the affairs of
the Company, but shall devote only so much of its time and attention as it shall
deem necessary and advisable. Each of the parties hereto acknowledges and agrees
that any of the Members may engage in or possess an interest in other business
ventures of any nature and description independently or with others, and neither
the Company nor the Members shall have any right by virtue of this Agreement in
or to such independent ventures or to the income or profits derived therefrom.
No Member shall be accountable to the Company for any investment or business
opportunity which a Member hereafter becomes aware of by reason of the affairs
of the Company. The Members and each of them hereby waive any and all rights
which they or any of them have now or may have in the future by reason of the
doctrine of partnership or corporate opportunity in connection with the affairs
of the Company. The fact that any Member, or any Affiliate of any Member, or a
member of his or her family, is employed by, or is directly or indirectly
interested in or connected with, any person, firm or corporation employed or
engaged by the Company to render or perform a service, or from whom the Company
may make any purchase, or to whom the Company may make any sale, or from or to
whom the Company may obtain or make any loan or enter into any lease or other
arrangement, shall not prohibit the Company from engaging in any transaction
with such person, firm or corporation, or create any additional duty of legal
justification by such Member or such person, firm or corporation beyond that of
an unrelated party, and neither the Company nor any other Member shall have any
right in or to any revenues or profits derived from such transaction by such
Member, Affiliate, person, firm or corporation. Neither the Company nor any
Member shall have any right in or to any such independent venture or investment
or the revenues or profits derived therefrom. The above references to Members
include the Manager, whether or not a Member. Anything herein to the contrary
notwithstanding, however, the Manager shall not acquire securities from or sell
securities to the Company without the prior consent of all of the Members.


                                       30
<PAGE>   37

                                  ARTICLE XIII

                                  MISCELLANEOUS

         XIII.1   COUNSEL TO THE COMPANY. Counsel to the Company may also be
counsel to the Manager or any Affiliate of the Manager. The Manager may execute
on behalf of the Company and the Members any consent to the representation of
the Company that counsel may request pursuant to the California Rules of
Professional Conduct or similar rules in any other jurisdiction ("Rules"). The
Company has initially selected Buchalter, Nemer, Fields & Younger, a
Professional Corporation ("Company Counsel") as legal counsel to the Company.
Each Member acknowledges that Company Counsel does not represent any Nonmanager
Member in the absence of a clear and explicit written agreement to such effect
between the Nonmanager Member and Company Counsel, and that in the absence of
any such agreement Company Counsel shall owe no duties directly to a Nonmanager
Member. Notwithstanding any adversity that may develop, in the event any dispute
or controversy arises between any Members and the Company, or between any
Members or the Company, on the one hand, and a Manager (or Affiliate of a
Manager) that Company Counsel represents, on the other hand, then each Member
agrees that Company Counsel may represent either the Company or such Manager (or
his or her Affiliate), or both, in any such dispute or controversy to the extent
permitted by the Rules, and each Member hereby consents to such representation.
Each Member further acknowledges that: (a) Company Counsel has represented the
interests of the Manager and/or its Affiliates in connection with the formation
of the Company and the preparation and negotiation of this Agreement and (b)
while communications with Company Counsel concerning the formation of the
Company, its Members and Manager may be confidential with respect to third
parties, no Member has any expectation that such communications are confidential
with respect to the Manager or any of its Affiliates.

         XIII.2   COMPLETE AGREEMENT. This Agreement and the Articles constitute
the complete and exclusive statement of agreement among the Members and the
Manager with respect to the subject matter herein and therein and replace and
supersede all prior written and oral agreements or statements by and among the
Members and the Manager or any of them. No representation, statement, condition
or warranty not contained in this Agreement or the Articles will be binding on
the Members or the Manager or have any force or effect whatsoever. To the extent
that any provision of the Articles conflict with any provision of this
Agreement, the Articles shall control.

         XIII.3   BINDING EFFECT. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and inure to
the benefit of the Members, and their respective successors and assigns.

         XIII.4   PARTIES IN INTEREST. Except as expressly provided in the Act,
nothing in this Agreement shall confer any rights or remedies under or by reason
of this Agreement on


                                       31
<PAGE>   38

any Persons other than the Members and Manager and their respective successors
and assigns nor shall anything in this Agreement relieve or discharge the
obligation or liability of any third person to any party to this Agreement, nor
shall any provision give any third person any right of subrogation or action
over or against any party to this Agreement.

         XIII.5   PRONOUNS; STATUTORY REFERENCES. All pronouns and all
variations thereof shall be deemed to refer to the masculine, feminine, or
neuter, singular or plural, as the context in which they are used may require.
Any reference to the Code, the Regulations, the Act or other statutes or laws
will include all amendments, modifications, or replacements of the specific
sections and provisions concerned.

         XIII.6   HEADINGS. All headings herein are inserted only for
convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.

         XIII.7   INTERPRETATION. In the event any claim is made by any Member
relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular
Member or his or her counsel.

         XIII.8   REFERENCES TO THIS AGREEMENT. Numbered or lettered articles,
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.

         XIII.9   JURISDICTION; ARBITRATION. Each Member hereby consents to the
exclusive jurisdiction of the state and Federal courts sitting in the States of
California or Nevada in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement. Each Member further agrees that personal jurisdiction over him or her
may be effected by service of process by registered or certified mail addressed
as provided in Section 13.13 of this Agreement, and that when so made shall be
as if served upon him or her personally within the States of California or
Nevada. Except as otherwise provided in this Agreement, any controversy between
the parties arising out of this Agreement shall be submitted to the National
Association of Securities Dealers, Inc. ("NASD"), or to the New York Stock
Exchange, Inc. ("NYSE") if the NASD refuses to accept jurisdiction. Any such
arbitration shall take place in San Francisco, California. The costs of the
arbitration, including any NASD or NYSE administration fee, the arbitrator's
fee, and costs for the use of facilities during the hearings, shall be borne
equally by the parties to the arbitration. Attorneys' fees may be awarded to the
prevailing or most prevailing party at the discretion of the arbitrator. The
arbitrator shall not have any power to alter, amend, modify or change any of the
terms of this Agreement nor to grant any remedy which is either prohibited by
the terms of this Agreement, or not available in a court of law. Each of the
parties reserves the right to file with a court of competent jurisdiction an
application for temporary or preliminary injunctive relief, writ of attachment,
writ of possession, temporary protective order


                                       32
<PAGE>   39

and/or appointment of a receiver on the grounds that the arbitration award to
which the applicant may be entitled may be rendered ineffectual in the absence
of such relief. Judgement upon the award rendered by the arbitrator may be
entered in any Court having jurisdiction thereof.

         XIII.10  EXHIBITS. All Exhibits attached to this Agreement are
incorporated and shall be treated as if set forth herein.

         XIII.11  SEVERABILITY. If any provision of this Agreement or the
application of such provision to any person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision to
persons or circumstances other than those to which it is held invalid shall not
be affected thereby.

         XIII.12  ADDITIONAL DOCUMENTS AND ACTS. Each Member agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions, and conditions of this Agreement and the
transactions contemplated hereby.

         XIII.13  NOTICES. Any notice to be given or to be served upon the
Company or any party hereto in connection with this Agreement must be in writing
(which may include facsimile) and will be deemed to have been given and received
when delivered to the address specified by the party to receive the notice. Such
notices will be given to a Member or Manager at the address specified in Exhibit
A hereto. Any party may, at any time by giving five (5) days' prior written
notice to the other parties, designate any other address in substitution of the
foregoing address to which such notice will be given.

         XIII.14  AMENDMENTS. This Agreement may be amended only upon the
written consent thereto of the Manager and a Majority Interest of the Nonmanager
Members, except that the Manager may amend this Agreement without the consent of
or notice to any of the Members to (a) cure any ambiguity, correct or supplement
any provision in the Agreement which may be inconsistent with any other
provision in this Agreement, or make any other provisions with respect to
matters or questions arising under the Agreement which will not be inconsistent
with the intent of the Agreement; (b) delete or add any provision of the
Agreement required to be so deleted or added by the Securities and Exchange
Commission or by a state securities law administrator or similar such official,
which addition or deletion is deemed by such agency or official to be for the
benefit or protection of the Members; (c) reflect the withdrawal, expulsion,
addition or substitution of Members; (d) reflect the proposal, promulgation or
amendment of Regulations under Code Section 704, if, in the opinion of the
Manager, the amendment does not have a material adverse effect on the Members;
(e) elect for the Company to be bound by any successor statute to the Act if, in
the opinion of the Manager, the amendment does not have a material adverse
effect on the Members; (f) conform the Agreement to changes in the Act or
interpretations thereof which, in the discretion of the Manager, it believes
appropriate, necessary or desirable, if, in its reasonable opinion,


                                       33
<PAGE>   40

such amendment does not have a materially adverse effect on the Members or the
Company; (g) change the name of the Company; and (h) make any change which, in
the discretion of the Manager, is advisable to qualify or to continue the
qualification of the Company as a limited liability company or that is necessary
or advisable, in the discretion of the Manager, so that the Company will not be
treated as an association taxable as a corporation for Federal income tax
purposes. Any amendments made pursuant to this Section 13.14 may by its terms be
made effective as of the date of this Agreement.

         XIII.15  RELIANCE ON AUTHORITY OF PERSON SIGNING AGREEMENT. If a Member
is not a natural person, neither the Company nor any Member will (a) be required
to determine the authority of the individual signing this Agreement to make any
commitment or undertaking on behalf of such entity or to determine any fact or
circumstance bearing upon the existence of the authority of such individual or
(b) be responsible for the application or distribution of proceeds paid or
credited to individuals signing this Agreement on behalf of such entity.

         XIII.16  NO INTEREST IN COMPANY PROPERTY; WAIVER OF ACTION FOR
PARTITION. No Member or Assignee has any interest in specific property of the
Company. Without limiting the foregoing, each Member and Assignee irrevocably
waives during the term of the Company any right that he or she may have to
maintain any action for partition with respect to the property of the Company.

         XIII.17  MULTIPLE COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.

         XIII.18  ATTORNEY FEES. In the event that any dispute hereunder should
result in litigation, the prevailing party in such dispute shall be entitled to
recover from the other party all reasonable fees, costs and expenses of
enforcing any right of the prevailing party, including without limitation,
reasonable attorneys' fees and expenses, all of which shall be deemed to have
accrued upon the commencement of such action and shall be paid whether or not
such action is prosecuted to judgement. Any judgement or order entered in such
action shall contain a specific provision providing for the recovery of attorney
fees and costs incurred in enforcing such judgement and an award of
pre-judgement interest from the date of the breach at the maximum rate of
interest allowed by law. For the purposes of this Section: (a) attorney fees
shall include, without limitation, fees incurred in the following: (1)
post-judgement motions; (2) contempt proceedings; (3) garnishment, levy, and
debtor and third party examinations; (4) discovery; and (5) bankruptcy
litigation and (b) prevailing party shall mean the party who is determined in
the proceeding to have prevailed or who prevails by dismissal, default or
otherwise.

         XIII.19  REMEDIES CUMULATIVE. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any person may be
lawfully entitled.


                                       34
<PAGE>   41

         XIII.20  POWER OF ATTORNEY. Each Member does hereby constitute and
appoint the Manager its true and lawful representative, in its name, place and
stead, to make, execute, sign, acknowledge, deliver and file all such
instruments, documents and certificates which may from time to time be required
by the laws of the United States of America, the States of California, Nevada
and Delaware, or any other state in which the Company shall determine to do
business, or any political subdivision or agency thereof, to effectuate,
implement and continue the valid and subsisting existence of the Company,
including, without limitations the Certificate and amendments thereto.

         IN WITNESS WHEREOF, this Operating Agreement has been executed on the
date first above written, with each person signing below as a Trustee of a trust
warranting and representing that such person has the authority to sign and act
alone without the signature of any other person.

                                    MANAGER

                                    THE SUTRO GROUP
                                    a Nevada corporation


                                    By:
                                       --------------------------------------
                                            John F. Luikart, President


                                    NONMANAGER MEMBERS

                                    John F. and Lorry A. Luikart Revocable Trust
                                       U/D/T dated January 23, 1997


                                    -----------------------------------------
                                    John F. Luikart, Trustee


                                    Bertelsen Family Trust
                                       U/D/T dated December 2, 1988


                                    -----------------------------------------
                                    Thomas E. Bertelsen, Jr., Trustee


                                       35
<PAGE>   42

                                    Tom and Nancy Juda Living Trust
                                       U/D/T dated May 3, 1995


                                    -----------------------------------------
                                    Tom Juda, Trustee


                                    Vermut-Weinberger Living Trust
                                       U/D/T dated March 22, 1993


                                    -----------------------------------------
                                    Thomas Weinberger, Trustee



                                    -----------------------------------------
                                    Donald J. Willfong


                                    Lind Family Trust
                                       U/D/T dated September 7, 1990


                                    -----------------------------------------
                                    Robert R. Lind, Trustee



                                    -----------------------------------------
                                    Mark A. Tunney



                                    -----------------------------------------
                                    Mark Rice



                                    -----------------------------------------
                                    John W. Eisele


                                       36
<PAGE>   43

                                    -----------------------------------------
                                    Anna Halloran



                                    -----------------------------------------
                                    Michael D. Brown



                                    -----------------------------------------
                                    Brian Kosar



                                    -----------------------------------------
                                    D. Larry Smith



                                    -----------------------------------------
                                    Douglas J. Burke



                                    -----------------------------------------
                                    Joseph A. Boystak


                                       37
<PAGE>   44



                                    EXHIBIT A

            CAPITAL CONTRIBUTION OF MEMBERS AND ADDRESSES OF MEMBERS
                                AND MANAGER AS OF
                            ------------------------
<TABLE>
<CAPTION>

-------------------------------- ----------------------------------- ------------------ ----------------------

        Member's Name                         Member's                     Capital             Member's
                                               Address                  Contribution      Percentage Interest
-------------------------------- ----------------------------------- ------------------ ----------------------
<S>                              <C>                                        <C>                           <C>
John F. and Lorry A. Luikart     2545 Union                                 $   80,000                    4.0
Revocable Trust U/D/T 1/23/97    San Francisco, CA 94123
-------------------------------- ----------------------------------- ------------------ ----------------------
Bertelsen Family Trust U/D/T     P.O. Box 397                               $   80,000                    4.0
12/2/88                          Ross, CA  94957
-------------------------------- ----------------------------------- ------------------ ----------------------
Tom and Nancy Juda Living        410 S. Lucerne                             $   80,000                    4.0
Trust U/D/T 5/3/95               Los Angeles, CA 90020
-------------------------------- ----------------------------------- ------------------ ----------------------
Vermut-Weinberger Living Trust                                              $   80,000                    4.0
U/D/T 3/22/93
-------------------------------- ----------------------------------- ------------------ ----------------------
The Sutro Group                  See below                                  $1,000,000                   50.0
-------------------------------- ----------------------------------- ------------------ ----------------------
Donald J. WillFong               2711 Bella Vista                           $   80,000                    4.0
                                 Montecito, CA 93108
-------------------------------- ----------------------------------- ------------------ ----------------------
Lind Family Trust                525 Berkshire Ave.                         $   50,000                    2.5
U/D/T 9/7/90                     La Canada, CA 91011
-------------------------------- ----------------------------------- ------------------ ----------------------
Mark A. Tunney                   11150 Santa Monica Blvd., 15th             $   50,000                    2.5
                                 Floor
                                 Los Angeles, CA  90025
-------------------------------- ----------------------------------- ------------------ ----------------------
Mark Rice                        830 So. Windsor                            $   50,000                    2.5
                                 Los Angeles, CA 90005
-------------------------------- ----------------------------------- ------------------ ----------------------
John W. Eisele                   33 Bay Way                                 $   80,000                    4.0
                                 San Rafael, CA 94901
-------------------------------- ----------------------------------- ------------------ ----------------------
Anna Halloran                    1133 25th St., #12                         $   50,000                    2.5
                                 Santa Monica, CA 90403
-------------------------------- ----------------------------------- ------------------ ----------------------
Michael D. Brown                 577 Peruqua Way                            $   50,000                    2.5
                                 Los Angeles, CA 90077
-------------------------------- ----------------------------------- ------------------ ----------------------
Brian Kosar                      201 California Street                      $   50,000                    2.5
                                 San Francisco, CA 94111
</TABLE>


                                      A-1
<PAGE>   45

<TABLE>
<CAPTION>

-------------------------------- ----------------------------------- ------------------ ----------------------

        Member's Name                         Member's                     Capital             Member's
                                               Address                  Contribution      Percentage Interest
-------------------------------- ----------------------------------- ------------------ ----------------------
<S>                              <C>                                        <C>                           <C>
D. Larry Smith                   75 Mountain Peak Road               $          80,000                    4.0
                                 Chappaqua, NY 10514
-------------------------------- ----------------------------------- ------------------ ----------------------
Douglas J. Burke                 11150 Santa Monica                  $           50,000                    2.5
                                 Blvd., 15th Floor
                                 Los Angeles, CA 90025
-------------------------------- ----------------------------------- ------------------ ----------------------
Joseph A. Boystak                125 Ketch Mall                      $           90,000                    4.5
                                 Marina del Rey, CA 90292
-------------------------------- ----------------------------------- ------------------ ----------------------
                                                                     $       2,000,000               100.000%
                                                                     =================               ========
-------------------------------- ----------------------------------- ------------------ ----------------------




---------------------------------- ---------------------------- ----------------- ----------------------------

        Manager's Name                  Manager's Address
---------------------------------- ---------------------------------------------- ----------------------------
The Sutro Group                    3773 Howard Hughes Parkway
                                   Suite 190 South
                                   Las Vegas, NV  89109
---------------------------------- ---------------------------------------------- ----------------------------

---------------------------------- ---------------------------- ----------------- ----------------------------
</TABLE>


                                      A-2